Mobile Navigation

Close Mobile MenuOpen Site Search

Useful Tips for Becoming a Homeowner

Main Blog Article Content


If you're set on buying a new house either now or in the future, you can use some important financial principles to make a safe investment. Avoid common mistakes and ensure a secure future for your family by taking these simple steps to becoming a homeowner.

Examine your current financial state

With a fixed budget already prepared, you’ll know exactly which homes and neighborhoods to look at. A fixed budget will make it easier for you to stay in your desired price range. If you are unsure about a budget or don't have one at all, here is an online calculator that can help you determine your monthly mortgage payment. In addition, it’s wise to stay within your budget as there will be other costs, like home repairs, insurance, utilities and taxes to name a few.

Consider your financial future

Remember that becoming a homeowner means making a long-term investment. You’ll have a mortgage payment for 15-30 years potentially, so you'll need to ensure financial stability. You might also want to research the location that is best for you in the long run since you may be living there for a while. For example, if you are going to be starting a family or have young children, you probably want to buy in an area that has a good school system.

Think location, location, location

Location determines the price of a home both now and later. Becoming a homeowner in a more desirable location (neighborhoods with great schools or a gated community) means spending more and competing with more buyers. With this in mind, search through different neighborhoods and areas that work for you and your family. Consider talking to local realtors, who may be more familiar with different neighborhoods that meet your preferences.

Look over your debt and credit score

Minimal debt and good credit increase your chances of qualifying for a mortgage loan. Strive to maintain a debt-to-income ratio of less than 43% and a credit score of at least 620. A higher credit score lets you qualify for lower interest rates. You’ll need to maintain low debt and good credit throughout the mortgage process since any large transactions could prevent closing.

Consider essentials vs. improvements

When you're daydreaming about becoming a homeowner, it’s easy to get caught up in the luxuries and upgrades typical of a brand-new home. But when you're choosing a home, keep in mind what is essential for you versus the improvements you'd prefer. Once you've found a home that is functional and meets your needs, you can improve it and add your personal touch later.

Gather a down payment

You'll typically need anywhere from 3%-20% of the home price for a down payment. You can put 10% down for example, but the lender will add a Private Mortgage Insurance premium to your monthly payment. You can avoid that extra premium by putting 20% or more down.

Get preapproval

As the next step, seek a mortgage preapproval. Lenders such as credit unions will request your financial information to approve you for a loan. After you undergo the underwriting process and receive a preapproval, a preapproval letter indicates to the seller that you are ready to buy.

Find insurance

Finding homeowners insurance is another step in becoming a homeowner. You’ll need this information by the time you are ready to sign. So, before you begin the final steps in the closing process, request several quotes and select the coverage and premiums that best suit you.

Get preapproved with Power Financial Credit Union

Yes, you can join Power Financial Credit Union and get preapproved for a mortgage loan. Visit us online to see the many types of loans you can take advantage of, from adjustable rate mortgages to FHA loans.

PFCU provides almost 35,000 members in South Florida with personalized service to fit unique situations. We're ready to help you with becoming a homeowner and turning your financial goals into realities.